RADICAL BANKING FIX

BANKS ARE PUBLIC, MAKE THEM TRANSPARENT!

Why Are Banks Dealt With As If They Were Private? When They Are Not?

An Obvious Corruption Of The Constitution?

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Abstract: I track the genesis of Fractional Reserve Banking, all the way down to imperial Rome (a full 14 centuries before Wikipedia has it, nota bene). Rome developed a serious money problem, a Fractional Reserve System, properly done, would have solved it. Instead Rome invented other useful institutions: central planing, feudalism, and a notional currency (a few centuries later the Song dynasty used another notional currency, paper money; Rome could afford the luxury of diluting more precious metals in copper coins).

A slight problem that our contemporary plutocrats have succeeded to hide, is that the power and advantage of Fractional Reserve Banking lays in the fact that it is state controlled. The state can change the money supply, as needed. Up or down. What the Roman Principate could not do. Rome had run out of money, unlike the Fed, or now, the ECB.

In this enormous power, notional currency, that is, fractional reserve, great opportunity, but also the risk of enormous corruption. China, which did not have enough silver and gold, used copper and paper currency. That led, after centuries, to a terrible inflation that destroyed the value of money (contributing to the fall of the Yuan dynasty). China soon became dependent upon Spanish provided South American silver.

Thus it is no wonder that Big Banking has turned into organized crime, thanks to Fractional Reserve banking. Corrupting the state through money fabrication gifted to friends, is a not a new crime, as cybercrime is. But its extent is new (by the way, early American presidents feared this, and took strong measures against it; president Jackson, not a shrinking violet, called it its “proudest achievement“, on his deathbed).

Nor is that crime unlawful as two of my smart interlocutors have pointed out. When a plutocratically minded Principate rises, it is careful to change the laws to suit its evil ends. A principate we have. Each time American media celebrates the “first lady” and “first family”, they celebrate the first man in Rome, the Princeps (as one says in Latin). Then Obama sends the first daughter to Mexico with a private army. At this point he implicitly tells the banksters: “I am one of yours! We are first! We own the world! welcome me in your arms! I need money!” It may not be conscious, but it is deliberate, at the subconscious level. Otherwise, why the outrage, when Angela Merkel herself flies not just in a common airline, but a low cost one?

However, differently from old Rome, and West County Men friendly England, France and the USA have WRITTEN constitutions. The first words in those Constitutions are the most important. There are six. Three in the USA, three in France. Those are clearly violated. (Could Obama understand that?)

The politicians, who have been in cahoots with the financiers, have been unwilling to turn against their accomplices (politicians get instantaneously punished, at least in financing: Obama, having raised his voice a bit against the financial conspiracy is running at 25% of the funding he got at the same point in 2008, when the banks thought he was in their pocket).

So, what to do? Very simple, having exposed the problem, one can actually roll out a solution. Democracy has to be transparent. Taxes are transparent, at least to the state. There is a reason to hide taxes from the public eye: income is a private matter, and so is spending… As long as they involve only private money.

However, if they involve credit, it is another matter entirely. Credit is the extension to private entities of public money. I will indeed argue that credit, when it involves banks enjoying the Fractional Reserve System, is actually PEOPLE money.

To keep CREDIT FROM THE PEOPLE clean and ethical, make that spending of PEOPLE money, public and transparent.

If not, it’s civilization itself, that will keep on going down the drain.

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BANKING AND INTEREST:

They are different notions. The Islamist civilization evolved a very complex financial system, with most of the characteristics of Western banking… But without charging interest.

What’s a bank? Originally, it was an organization B that pooled otherwise unused capital, and then gave said capital to some other entity C that could make use of it. The capital was lent, and that means, that it was reimbursed slowly, according to the creditor C’s capability.

One may wonder why bank B would lend money.

For doing so, interest was invented. However, after a few generations of free interest rates, the Roman republic observed that interest made the rich richer. Interest was restricted to 10%, then 5%, and finally outlawed interest in 342 BCE (that’s not long after the writing of the Bible’s Old Testament, although at the time Rome knew nothing of the Jews). By contrast, the European Union has allowed recently money changers charge states of the Union interest over 30%.

Otherwise said, today’s Europeans are like the Romans of 26 centuries ago, before the Roman revolution, rather than as enlightened as those of 23 centuries ago…

Abrahamist faith declared that banks would lend to co-religionists out of the goodness of their heart. Lending money to heathens and miscreants could be done against interest, a supplementary payment or tax, well in line with scripture.

Scripture mercifully envisioned the survival of miscreants, as long as they paid interest. Thus banks, complete with lending against interest, could exist. They were obviously private enterprises.

So far, so good. Then something happened that even the perverse writers of the Bible and Qur’an had not anticipated, even though, their delirium, they generally get all the angles covered.

The Fractional Reserve System was created. The preceding link, to Wikipedia, does not go in the mathematical details. I have already explained in Fractional Reserve Gouging, and many other essays, that Fractional Reserve Banking (FRB) is intrinsically unjust, and an engine for constructing neo-feudalism.

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The FULL HISTORY OF FRACTIONAL RESERVE BANKING STARTS WITH ROME:

American Wikipedia, as a faithful servant of New York finance, starts the history of Fractional Reserve Banking, FRB, with the Dutch: New York started as New Amsterdam, and the Netherlands, having been created by… France (to a great extent), then conquered England (!), inventing the highly leverage finance tied into the state that we observe now in the USA.

Immediately after inventing astronomical leverage, the hyperactive Netherlands turned against its creator, mightily arrogant France, the greatest land power… That is why highly leveraged finance had been invented, to start with: to give the Dutch armies power much beyond the tiny size of the Netherlands. That financial power went into an enormous Navy, soon duplicated in England, and the Bank Of England was created to finance it!

In truth it did not dawn on Wikipedia that FBR was a solution to a problem that was in full evidence in imperial Rome. Naturally enough, the solution was found in the Italian republics, a millennium after Rome only partly solved its financial quandary.

To fully understand FRB, one has to go back to the Third Century of imperial Rome, the Third century of the Principate, which started with the Libyan Septimus Severus, imperator of the Illyricum armies (“Balkans”), sending back the Praetorian Guard to its barracks, and becoming Princeps in its stead.

So it started well, but it ended with catastrophe: constant coups, “barrack emperors”, a massive plague killing much of the population… And a collapse of the financial system. There was basically not enough currency for the empire’s growing economy.

That was caused by a lack of precious metals. Rome used a three tiered system; copper, silver, gold (China had mostly only copper, making the currency impossible). Rome ran out of silver and gold. Five centuries later, the Franks got the precious metals, lots of silver, in newly conquered Eastern Europe, to feed their free market.

The Roman government reacted in two ways:

1) by creating a notional currency with a fictional relationship to the gold currency they kept on using (the latter was to stay in use in the Imperium Francorum/Romanum through the Middle Ages until 1,000 CE).

2) by setting up a government regulated barter system. That was a further step in the instauration of feudalism. By the way, such a system is basically in force between the West and the feudal lords of the Middle East, as many an enraged Muslim fundamentalist will tell you, while foaming at the mouth).

While doing this, the organization of the empire switched from the Principate to the Dominate(although I give references to Wikipedia, that does not mean I agree with all what’s there; it’s just a rough, and raw idea of the referred notion. In particular that article evoked that the “Western empire formally collapsed in 476 CE” is simply, and formally, false).

The switch to the Dominate corresponded, to some extend to the switch towards a command and control economy (paradoxically, there is no contradiction between the growth of command and control and the growth of plutocracy; plutocracy crowded out the free market, as did the dwindling technological options, due to the faltering of timely technological progress).

After 1,000 CE, as Western Europe, propelled by beans and other scientifico-technological advances, became richer than the Roman world had ever been, more determined efforts were made to reconstitute the Roman republic. The Franks had protected the reconstituted republics, such as Venice (after all the Imperium Francorum was supposed to be a republic, with elected heads of states). So:

3) Banking appeared fully, in an addition to the Roman system (1) money backed by the armed force of the government and 2) mandated state enterprises, above). The Italian republic created government bonds (to pay the armies), and Fractional Reserve Banking.

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FRACTIONAL RESERVE BANKINGAROSE WHEN…

Paper notes representing the precious minerals in the vaults of banks, were themselves traded. It was soon realized that this was identical to the main Roman monetary system of notional currency, and, that, just as in Rome more of these notes could be traded than the precious minerals they represented.

So, instead of using fake precious coins as Rome did, the Middle Ages switched to promissory notes, paper money, and the like. Before soon, the governments, whose armies protected the bank vaults, came to use those notes as currency.

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MAKING FRACTIONAL RESERVE BANKING CONSTITUTIONAL:

From the preceding, it is hopefully clear that banks, even private banks are actually STATE enterprises. All they have that is private is who manage and exploit them. But they are on a mandate from the state to create credit, that is, money.

Some will scream as they read this, and tell me that I understand nought. Yet, I do, and they don’t. There is total lack of understanding, true, but it’s on their part. The only way to have really private banks is with no leverage, whatsover, and no back-up from the state. I would say that, when a big bank uses 97% leverage, it’s at least 97% people owned. (It’s more than 97% because of the back-up of the bank from the state.)

In 2008, the “Fed” would lend 50 billion dollar to Lehman Brothers in the morning. Every morning. The three top guys at Lehman walked away with 5 billion dollars between them, or so. The money was never recovered, nor do the fat cats want us to think of it this way. Your money is their money, end of the story.

Thus I believe that, as banksare actually public enterprises, they ought to be people controlled, instead of being milked by a few individuals who golf with the political chiefs. Instead of having bankers buy politicians, we should have the people, checking them both, under scrupulous laws.

How to do this? Make all and any bank transaction public, and pass laws to insure that any extension of credit from any bank is economically justified. Moreover use the Internet to publish the whole thing, so that everybody can have a look, check, and report to the government, if they spot any deviation between the official reasoning to support some investment, and the reality of what is going on.

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BECAUSE BANKSARE PEOPLE OWNED, THEY SHOULD BE PEOPLE CONTROLLED. That does not mean they should people managed. Air Traffic control, or the Army are people controlled, but they are not people managed (that was the point that eluded Plato and Socrates!)

The preamble of the Constitution of the USA is very clear. It starts with three words:

“We The PEOPLE”

(yes, in capital letters). It does not start with: we the politicians, we the bankers, we the plutocrats, we the conspirators of the United States of America, we the republicans, we the fat cats of America, we the free marketers (not to be confused with the three musketeers).

The French Constitution starts with “LIBERTY EQUALITY FRATERNITY”, not “Slavery Inequality Inequity”. Actually the Article Two of the French Constitution says the French government is “par le Peuple, pour le Peuple“. It is not a government by the bankers, for the bankers.

The bankers reply that they are somehow uniquely qualified, but their only apparent qualification is the greatest misallocation of capital, ever. And the fact they stayed out of jail or the scaffolds, while doing so, is also unique in history.

All other constitutions are a mix of the French or American ones, that is why fixing France and the USA is key. (Britannia does not know how to write, apparently, so it is hard to know what it is about, and that is why nations around the globe have inspired themselves from the French and American idea, from 1789, to sit down, and write a constitution).

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NO DEMOCRACY, SAYS WALL STREET:

After I wrote a shorter version of the preceding paragraph in the Wall Street Journal’s comments, in an article which exposed president Obama’s love for a fat cat, Mr. Wolf, the head of UBS. Somebody working in the finance industry, John Crocker, replied scathingly that we “you do not understand anything … certainly not banking. If you’d like to think you do … well, what color is the sky in the universe where you live? Banks should be “people controlled”? … we do not live in a “Democracy” .. we live in a representative republic. And also one that happens to be based on free market principles… In many ways, the US Government is now more of a “criminal enterprise” than any bank has ever been. Only because the government itself decides what is “legal” or not, they will never be arrested. Yeah … bankers cultivate and form relationships with federal politicians … Why? They have to.”

I think the response is pretty telling. Fat cats on Wall Street see, in the preamble of the constitution of the USA: “We The Free market of America Have A Republic Where We Are Represented” Old Geezer Pilot on this site concurred:

“It is not organized crime.

It is not even disorganized crime.

Because during the past 30 years, those banking operations and financial transactions have been made PERFECTLY LEGAL by our Congress. The best politicians money can buy.”

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IGNORE THE CONSTITUTION, GET CIVIL WAR & NAZISM:

From above, one can see that Congress has strayed from the Constitution. The Constitution is about a “PEOPLE” regime. Unfortunately, when the Constitution of the USA was written, it was not thought to create a Constitutional Court. France has one, so now does Germany. Both courts have come out with interesting decisions the Supreme Court of the USA (SCOTUS) could never have come up with. SCOTUS has traditionally adopted a small role of pseudo Constitutional Court, but was unable to stop the multi-generational march to the American Civil War. That war was absolutely devastating. Scholars have revisited the number of dead. Upwards.

For 110 years, the numbers stood as gospel: 618,222 men died in the Civil War, 360,222 from the North and 258,000 from the South — by far the greatest toll of any war in American history.

But new research shows that the numbers were far too low. By combing through newly digitized census data from the 19th century, J. David Hacker, a demographic historian from Binghamton University in New York, has recalculated the death toll and increased it by more than 20 percent — to 750,000.

The new figure is already winning acceptance from scholars… A pre-eminent authority on the era, Eric Foner, a historian at Columbia University, said:

“It even further elevates the significance of the Civil War and makes a dramatic statement about how the war is a central moment in American history. It helps you understand, particularly in the South with a much smaller population, what a devastating experience this was.”

Well, it ought to have been a devastating lesson. What was the lesson? That, when one let festers an unconstitutional situation, an infection of civilization by infamy, gangrene sets in.

However, the leaders of the USA, did not learn their lesson. When American plutocrats ran away with Hitler, Stalin and company, even president Franklin D. Roosevelt did not pay attention to the problem that “We The PEOPLE” was threatened with.

FDR may have talked loudly against Hitler, but he let American banks finance him, Wall Street organize its largest companies. And when it came to stopping Hitler, FDR never stopped encouraging the few fascist French collaborating with Hitler. (As the southern front was opened from Africa, and turned into a disaster for Hitler by Spring 1942, this was of great military import, as Churchill kept on pointing out.)

Companies such as IBM or Ford were allowed to collaborate with the Nazis throughout the war. That means they did not just kill European Jews, French, and the like, but also American GIs, and bomber crews. IBM had the monopoly of computing all over the Reich. That meant that the backbone of any serious organization in Hitlerland, from trains to directing fighters towards Allied aircraft, was Made In America.

What we are confronting now is exactly the same syndrome: banking is grossly violating the spirit of the Constitution, and the political leadership is out there, golfing with the miscreants.

Banking needs to be completely changed. Banking needs to made democratic. It was done with the military, it can be done for the money changers.

Better a look within the machine that fabricates money, rather than letting the crooks have it. Better a look than a crook.

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NOT ONLY WILD BANKING DEVOURS DEMOCRACY, BUT CIVILIZATION ITSELF:

Yes, banking is devouring civilization. The capability of finding Earth like planets exists. Now. It is just a matter of placing in space a football sized telescope, and making a spectral analysis of small planets. Seeing a lot of methane would be an indicator of life. Seeing oxygen would prove photosynthesis is going on.

NASA and ESA had two such space telescopes, ready to go. NASA had its Terrestrial Planet Finder. Europe had its Darwin telescope. But the money was cut off. Why? Bankers. Not only they steal us, and they make us stupid, but they are making us blind. And they want us NOT to think of the grander poetry of another Earth. If we are too elevated, we may find them too base.

One has also to understand we have only one chance at advanced civilization. This is it. The technological tricks we have been using have depended on accessible oil, gas, and coal, for energy, and accessible metals, thanks to all that accessible energy.

When Rome could not access metals anymore, because they were too deep, and Rome did not have enough energy to get to them, it was a disaster. Roman armies could not build the weapons they needed, from lack of metals. Ultimately, around 660 CE, the Roman emperor decided to strip the metal from all the roofs of Rome, to get the metal needed to fight the Muslims. He went to Rome to oversee the operation.

Our situation would be worse: Rome depended on burning wood. we came to depend upon burning fossils. If the fossils are too deep, or hard to get to, or have been exhausted, we cannot wait for them to regrow. Forests can regrow, not fossils.

We have to use that opportunity we have now, to access higher magic (advanced forms of solar and nuclear energy, including fusion; maybe unanticipated forms such as vacuum energy, plus designing materials atom by atom).

If we do not, the world economy will hit dwindling resources. That could be as early as 2016.

The solution that will then impose itself will be war, and unimaginable forms of exploitation. Think Genghis Khan, with the caveat that Genghis was acting out of a mix of indignation, vengeance, opportunity, and the necessity to keep the 200,000 men Mongol army on a mission. Genghis Khan was not acting out of despair, because he was a cornered rat. Still, he caused terrible wars.

Now we have states, such as Israel, that reason like cornered rats, and fidget with their nuclear weapons, while mumbling about annihilation. Not a good symptom (as Gunter Grass rudely remarked).

In a way, we are threatened to all turn into cornered rats. If we let the bankers eat all the cheese, we sure will.

41 Responses to “RADICAL BANKING FIX”

We used to have a FRB system that worked. It required that the FED actually regulate the capitalisation of each bank, limit the SIZE of each bank or group of banks, and keep the casino banks of Wall $treet segregated from the commercial banks of main street.

Bush the elder signed away the limitation on the size by allowing interstate operations.

Clinton signed away the firewall of the Glass Steagall act. He also signed the Commodities Futures Modernization Act, which made it ILLEGAL to regulate Structured Investment Vehicles, which are the real weapons of mass destruction.

Bush the lesser appointed regulators who agreed not to regulate, as the banks stealthily increased their leverage from the previously accepted level of 8 to 10 up to 40.

So here we are.

I personally have moved my bank account to a credit union. I know it is a drop in the ocean, but I hope that many others will do the same.

Dear OGP: I did not realize that about Bush Sr. Now of course the bank managements and their owners were already very influential to get that. One can see that banks have tremendous influence in rather small (Switzerland) or tiny (Luxembourg) places. So, although Too Big To Fail Banks TBFB are metastatic cancer, even the small ones are significantly malignant…

My proposition would be a democratic aim. A fully democratic FRB. Something for true democrats to push for.
At this point the entanglement between TBFB and government is such that it is as if the TBFB could go on their own, doing derivatives and CDS to the horizon, getting monetary base from the Fed, and money from QE. No need for small depositors?
If everybody went to credit unions, however, it would make the support of the gov for the TBFB more difficult. So you are doing what needs to be done…

It is not clear what leverage is used at this point by the TBFB. I have read anything between 1 to 30 to 1 to 12 (Basel III)…
PA

The leverage genie is out of the bottle. There are so many ways of “cheating” using off-balance sheep transactions and derivatives that the only solution with a chance of compliance is to set a limit on size. Sherrod Brown proposed 100 Billion. He couldn’t get to first base.

Dear OGP: I just added to the essay a mention that the Roman republic actually outlawed interest in 342 BCE. The law was still enforced under Princeps Tiberius, but then, because of lots of cheats, the government cracked down, and proceeded to enforce a vast confiscation of wealth. Said wealth was redistributed by national banks created in an emergency program. I am going to study this in more detail, because it looks very instructive.

Like Tiberius, one could pass laws making everything shadow and leveraged, unlawful. If the old Roman republic, or Tiberius could do it, why can’t we?

Money laundering is, officially and to some extent, unlawful. The same could be, and ought to be extended to unproductive leverage. “Unproductive” could be defined as not leading to sustainable, intelligence supporting activities in the long term.
PA

There is very little need for complex banking services. Most of banking should follow simple and prudent rules (In my opinion, the Basel rules don’t quite go far enough).

You can’t really buy shares of a hedge fund that beats the market, so most large investors, like pension funds, need simply to buy a mixed bag of index funds, property and bank deposits. All the financial services that are sold are much less advanced than they are cracked up to be.

Most people would do more than fine with a bank account, and the people looking for higher risk/return would probably to just as good with as without the help of a bank, simply following ground rules about hedging, not leverage their investments with debt, and not betting more than they can afford to loose etc.

The important function of the financial markets are about making informed long term bets like biotechnology, LFTR, space tech etc will be all the rage 30-100 years from now. You don’t need a lot of financial knowledge to do make those kind of bets, but what you do need is knowledge about those areas, and preferably about how fast technology will mature etc.

When the financial markets now are trying to factor the risk of sovereign default into the price, they are doing such a poor job because they have no clue about the the subject area, politics. In the same way that they had no clue about IT and created the dot com bubble out of a few buzzwords rather than trying the get real, hard information.

I’m saying that financial markets can be extremely useful tools at times, but you hardly need an army of people to maintain them. The only thing you need is a bunch of real people and institutions betting real money, that they are afraid of losing.

Dear Jens: I agree with all you say. Derivatives ought to be outlawed, except when they can act as commercial insurance. In particular, CDS ought to be made unlawful. They are used for reality sinister reasons, and, on the face of it, don’t work (see with Greece where only 3 billion of CDS are activated, or so, in face of a default of 150 billion or so).

A deeper problem is the parallel trading OFF exchanges, and conspiracies attached to that. That sector os growing very fast, to escape regulations.

For example facebook just bought instagram for a billion, yesterday. Any reasonable valuation of facebook ought to be around 10 billion, no more (except if it’s a CIA operation backed by the full guarantee of the U.S. government). However Goldman Sachs will probably get a 100 billion IPO out of it, and buying Instagram for so much money is part of the buzz to go towards the 100 billions.

That will give an excuse for retirement funds managers to invest in facebook, that is, to translate more retirement money from retirees to plutocrats…
PA

The fb valuation is beyond ridiculous. The only thing fb has is a large and growing user base. But like crapple, their product is inferior. Brand loaylty doesn’t work the same way on the internet as it does IRL. Online, people can switch in an instant, so what you need is not only the best product, you need the best organisation that is fundamentally built on ‘continuous improvement’.

Like fb, crapple (http://tech.fortune.cnn.com/2012/01/18/inside-apple-adam-lashinsky/) is incredibly overvalued. Crapple’s products are overpriced and proprietary. Crapple has had an advantage over other companies when it comes to design, but it really isn’t too hard to think of a minimalist design that looks good…so the others are catching up. But as you can see in the link above, crapple’s organisation is fundamentally flawed as they compartmentalise and coerce their employees.

My point is that people use crapple and fb through a mix of clever marketing and herding. Those effects are not permanent, especially not in an environment like the internet where information (still) flows freely. Google has no illusions that people use their products for any other reasons than that they are useful. Their philosophy is that of a (good) programmer, to make the structure (in this case, that of the company) as perfect as possible, and…eventually, people will come to you.

Dear Jens: I know nothing about programming, but I have seen Internet marvels come and go. See Murdoch, who bought “MySpace” for a fortune, and sold it for a miser… Some French journalists said (in France) that they recognized several CIA engineers working at fb headquarters one day, as they casually passed by. In any case fb is clearly a shadow banking style operation led by Goldman-Sachs. I also have some inner track info on the VC behind it, and let me just say some of their strategies ought to brought to justice (the laws already exist, but they are not being enforced). The WSJ ran stories about that years ago, and then it all calmed down…
At this point only Google is in hot water, because the EU has put it under examination for unfair practices…
PA

my point was that you can build a new application/website that becomes extremely popular from almost nothing. But rolling out a good organisation is not done in a flash. Also, it cannot easily be copied.

Google should rightfully be scrutinised because they are a fundamental part of so many million people’s infrastructure. I just wish the same scrutiny would be afforded other big and fundamental companies like the pharmaceutical companies. Their collusion with government over the swine flu vaccine was outright robbery.

The MBA’s will always be smarter and faster than the regulators. And more numerous. Hence, the only things we can hope to do are to limit the size, limit hedging to those in a position to take or make delivery, and require CDS sellers to post collateral.

Stuff like that.

Otherwise, we will have 10 regulators for every hedgehog, and still fight a losing battle.

dear Jens and OGP: If Tiberius could do it, so can we! There are LOTS of example in Western history when much more colossal and entrenched interests were completely crushed. Lenin may be a bad example, because he was a bad person, but plenty of other examples abound. Say Philippe Le Bel taking on the Church: the Church got taxed by the French king and his vassal, the English king, then Philippe proceeded to terminate the Pope, send the Papacy to Avignon, the Templars to the fire (after expropriating the order).

Also the way the Franks subdued the Catholic church after 476 CE, used pure military force; they had it, the church did not.

Outlawing Shadow Banking is feasible: it could be assimilated to money laundering. The argument can be build to identify them, actually.

CDS are there ostensibly for insurance, but of course they are nothing of the sort (they could never post any significant collateral). They are there for another reason: to fake false profits.

This being said, I agree with OGP that just a bit of regulation and mitigation would probably drieve them out of their conspiracy… True the MBAs are numerous. I saw an article recently saying there was an absurd number of MBAs, and becoming one of them could not possibly pay.

So MBAs are numerous, and there is an infestation of them. It’s cyclical. So are the lemmings. Obama and the likes have behaved like ants; so lemmings look huge to them, they crave to please them. To keep lemmings in line, we need wolves and eagles.

Once, a few years ago, a stupid Parisian banker threatened with termination, in an email. That’s the attitude we want! We want to welcome their hatred1 We want them to attack the stick we thrust in their Wall Street of a house, extract the stick, and gulp down all those silly insects!
PA

To separate banking from shadow banking/money laundering, one clearly needs to shed some light. Patrice’s demand for transparency would clearly do its bit to make the shadows recede back into the dark corners. OGP, I also agree with you that regulation is not the way to control this SB/ML business, one can only control and regulate that which is in the light and one can see.

Besides, tax systems are way too complicated. The result of all the special interest and deductions and plethora of rules is in effect a regressive tax system. It means that those who can afford tax planners, end up paying very little tax. The only true tax, that eliminates economic efficiency would be a land tax. (read more here: http://en.wikipedia.org/wiki/Geolibertarianism)

When it comes to MBAs, surely there are too many, but the problem lies much deeper. The entire education system is broken. There has been a massive increase in people getting higher education, mainly because work has become more knowledge-intensive. The result is that we have gone from about 1/10 of the population getting some kind of a degree to about 2/3.

A degree is a lot more about getting a job than it is about gaining knowledge. Hence the rise of the ubiquitous MBA, people simply want to get a degree so that they can get a job. And since universities are more about getting a job than about gaining knowledge, they have become very similar to the industrial society school system that aims to churn out as many assembly line workers as possible…and this is exactly opposite to what the employers need.

So what do we need? We need a system that favours knowledge over degrees. Knowledge also needs to be spread to the people. http://www.udacity.com is an example of a high quality lecture with grading and support, being available for anyone for free. Extrapolating this system away from sciences might prove difficult, but by slightly changing the way we define subject areas this should be possible.

Dear Jens: Agreed to all you say. The educational system pre-university in Finland is highly performing. It has two characteristics: it’s expensive, with lots of teachers, and it’s equalitarian: there are no private schools in Finland. Sarkozy and its gang talked about setting it up in France, before declaring it was too expensive… And what they did not say is that the educational system in France is non equalitarian.

One thing that would help would be to set engineers in the USA again at the top of the heap. As they were in 1940 (say). But of course some confuse writing code with all there is to do with engineering. In truth there is giant amount of imaginable progress to be made in all sorts of conventional engineering (say better concrete; a French company sells a concrete ten times stronger than normal concrete… (the Iranian bunkers have it) but much more could be done)…

Italy is implementing a new tax on housing, by the way… But it varies wildly from region to region… each of these is roughly the size (in population) of an American state.
PA

Dear Patrice, the Finnish really have understood a thing or two (most Finnish support nuclear power even after Fukushima, and young Finns dream about becoming engineers rather than celebrities…or so I’ve heard)!

The absolute indisputable factor the Finnish have though, is the quality of their teachers. They have been focusing on teacher quality for several decades(http://en.wikipedia.org/wiki/Education_in_Finland#Teachers), and such long term effort has its rewards. Teaching clearly should be the most important and highest respected profession in all countries!

Maybe the Italians can finally get to tax alle the banksters that have bought up sweetspots all over Tuscany!

Dear Jens: yes, the Fushima disaster has the good side, that suddenly the Japs are realizing in what terrible danger they are from tsunamis. There was an 8.6 Richter quake today off Sumatra… No tsunami… But (an island in) Japan has an 85 meters tsu in the 20C and a 100 meter one in the 19C… Baffling numbers…
As I always say, if anything this shows how safe nuclear energy, even first generation, is. Four reactors below a wave (we have the picture!)… Nobody killed… (Yet!)

Norway has had a giant Muslim immigration (with the result of the massacre by the crazed anti-Muslim Nazi)… So its PISA may be pulled down. I know a Norwegian living in the USA who tried to migrate back, and came back with horror stories as she asked for help from the Norwegian gov. She did not like her, a blonde Norwegian born, to have to stand with hordes of veiled Muslims to apply for social security… She fled back to Alaska… To be continued…

Finland has apparently two teachers per class, the main one, and a helper. They tend to work according to the Oxbridge system from what I see. Teachers provide one on one explanations to those who need them.

Italy is all in huff and puff about the crackdown on tax evasion. La Guarda Finanziale stop on the fly expensive vehicles on the roads, and check their finances with tablet and laptop computers, just there. Many a Ferrari is driven by a beggar, un miracolo piu extraordinare!

Of course, in the USA tax evasion is legal, so it’s another type of mafia, entirely…
PA

I am Norwegian and for the time being still living there, so here are my two cents:

Actually, Norway has fewer muslims (as a percentage of population) than France, Belgium, Austria, Switzerland, The Netherlands, Germany, Sweden, Liechtenstein, Greece, UK and Denmark. The massacre was simply the work of one man with a strange world view. I think the massacre also could could have happened in other countries. But if there is one aspect of Norway that possibly could have contributed, it must be the pressure to conform to the social democratic norm.

One example is that the concept of ‘freedom of speech’ has been mirrored by the iffy concept of ‘responsibility of speech’. Not everyone accepts this, but many people think (well I’m not sure they are really thinking about it) that if you have extreme or deviating opinions, you should shut up. This is probably connected to the very Scandinavian ‘Law of Jante’ (http://en.wikipedia.org/wiki/Law_of_Jante).

Apart from some idealists, many teachers in Norway are often the ones that failed in the education system themselves. If you want to become a teacher in Norway you need a minimum of something like a C-/D+ average and not less than a D in Norwegian and Mathematics! (this is actual fact!)

Dear Jens: Amazing that you are Norwegian (the one I was alluding to is a close family member… who spent most her life in Alaska, naturally enough). I hope I did not offend with what I said… I hate it when people talk about countries I know well in a dismissive way. I agree that that lone wolf incident in Norway, similar to the one that just happened in France (we should have put them in touch), could happened anywhere, and soon they will be able to kill much more, except if one is very careful. Actually the water systems are now closely watched!… they were not before 9/11…

Breivik is not just a nut, as he would be first to point out (nor was Mehra in France).

From what my family member told me, the social system in Norway is flooded with Muslims, at this point. So perhaps what is going on is strong, sudden immigration. Say in the last ten years. A flood of people who know nothing about Norway… (Say). A possible example: the story of that Indian family, where the child was removed by intrusive social services…

Take an example: France, in second or third generation Muslim migrants, has a population as big as Norway (although the exact number is not known, as it is against the law to find out). However France has a zero new immigration policy. So Muslims in France are either fully French, or unlawful immigrants. 99% of French Muslims are very well integrated. They don’t differ much from other French.

If one wants to go back to Norway, after an absence of several decades, as my mother in law wants to, she meets social services swamped with recent Muslim immigrants.

I know one thing: I went back to France for the birth of my daughter, and my doctors were outraged by the fact that I was treated less well than any Algerian. France has an accord with Algeria, to cure many an Algerian for free, de facto, but not so with French born citizens who were (nearly always) always out of the French system. I knew a bit of the problem, however, I was surprised of the extent to which the French state would charge me for everything (although I have paid colossal taxes there over the years… without physical presence!!!!).

My mother in law was positively enraged though, and she said she would rather stay in the USA (where she has social security), than have anything to do with Norway again (she had left Norway when she was on the Olympic team). I don’t have that luxury, to get enraged, and maybe France will become more hospitable, after Hollande (funny name!) becomes president… I will rather educate my daughter there than dodging bullets, and spite for thinking, in the USA. My various stories with Obama and his admirers was an eye opener…
PA

Dear OGP: Well, we all agree about Obama. In my case, it has a poignant dimension. I worked huge for him, even, but there is something about him, that he seems to have no time for being nice to his real friends.

The Obama affair has split my family in two, as most of my American family, who identifies with Obama, has proclaimed me the devil (and even racist!), and thus has refused to even see my daughter. Not even once. The funny part is that I am a progressive leftist (relative to them), and now they call me a racist reactionary to the right of god knows what, although I worked hard to elect the hope that never was.

This is all very confusing. The one lesson, though is that just the smell of power makes (some, or most?) people completely crazy. In my case, I saw them throw the baby with the bath. That from people who believe they were Buddhist, indifferent to power, and certainly right wing (before their friend Bambi rose higher than the sun).

And last. But not least, I am of course faithful to the picture Obama gave when he ran for the presidency the first time. Now the Americans may want to ask themselves: what did he do that was good for the USA? The French are asking themselves the same question about Sarkozy. Final answer in 26 days or so. Meanwhile, the polls show that most French believe that Sarkozy plots with the rich (the number one problem they have with him). It’s actually fascinating, because Sarko is so much like Obarom. But the latter has been more keen to say that he wanted to tax the rich more (easy to do: the rich pays 50% tax in France, and Romney 13.9%! So Obama could triple the tax on the hyper rich and still be below France’s current rate).

In any case, let Obama run for re-election against Romney with Romneycare as his proudest achievement! While advertizing his channeling of the USA’s second richest man as his social adviser, to seduce the popular masses.
PA

Amen about Obama. People have been calling for a third party – I say why not get a second party? As for Sarkozy, well we all know he represents the rich. My big question is WHY oh WHY did DSK get thrown under the bus? No Frenchman could care less about his indescretions. But, he IS a socialist, and was a shoo in to win next month. But, alas, I saw his picture on a milk carton recently.

Jens, I think you are right about land tax. After all, it is really hard to move land to the Cayman Islands, unlike money. And, as I don my tin-foil hat, did anybody see Ken Lay’s body? DId he really die, or did they smuggle him down to Cayman to be with his billions? Nobody knows.

Dear OGP: I heard that polls said that many people in France believe Sarko framed DSK. The last charges in France against DSK are grotesque. I read some details in the anti-socialist Figaro yesterday, and it’s clear the charges don’t hold water (and the Figaro is clearly anti-DSK). 15 parties at most (says the Figaro) are in question. There would have been prostitutes in them (graciously provided by Jojo La Saumure in Belgium, where it’s all legal). It’s not unlawful to use, or being, a prostitute, in France.

I made clear that Wall Street framed DSK. So Sarko, as the French think, or Wall Street, as I claimed? Both. Sarko’s brother was a major on Wall Street, head of the Carlyle group. Sarko bro of Sarko just tired to sell his modest abode in New York for more than ten million dollars. I say: put them all in jail.

Why the rage agianst DSK? Because he was sure to be elected, he knows where all the bodies are buried, how rotten the system is, and he has the pride of those people, the intellectuals, who know that the intellect is greater than gold. So he was a deadly enemy both of W$ and Sarko.

But plan H, Hollande, will pass, except if he got assassinated, or something like that. That’s going to put a crimp on Obambi, Sarko, and W$.

Sarko and Obama were on video conference today, about Syria. Obama wa worried about Sarko re-election, and wish him well. Sarko told him not to worry, they would both be re-elected “ensemble”.
I am going to have fun when, within 26 days or so, Obama is going to learn, from Hollande that France is getting out of Afghanistan by the end of 2012.
PA

Incidentally I used to have a great aunt who used to live in Anchorage. Anyhow, I don’t have loaylties to nation states. I consider myself human first, and what I like the most about Norway are experiences with nature (and these are not exclusive to Norway). I like some parts of the Norwegian culture, and other parts I don’t like, same as with what I have seen with other cultures and I’m sure you have a similar ambivalent relationship with french/american culture.

The point about the social system and muslim immigration in Norway is a complex issue. And it is easily misunderstood due to an extreme spread of misinformation. There are mainly two types of immigration in Norway: work immigration (almost exclusively from the EU, due to free movement of labour* and refugees seeking Norwegian asylum protection from conflict and persecution.

Most of Norways muslims are asylum seekers, children of asylum seekers or family reunion with any of the above. When someone seeks asylum in Norway, they are usually sent to an ‘asylum-seeker house’ where they have to wait while their application is processed. Here they are not allowed to work, they can move around as they wish but the integration process is in no way started as their application for asylum has not been processed yet and they may be expelled. The problem here is that the beuracracy often takes 3years+ to work through the application. And three years sitting on your ass in some sort of limbo is not a good, activating start in society.

Most Muslims in Norway are doing fine, are productive members of society and are fully integrated. In the second and third generation they even seem to be doing better at school than ethnic Norwegians. But overall they have a higher unemployement rate and a higher crime rate than the overall population. However, if you measure for social status, the crime rate is on par with the rest of the Norwegian population.

So it is all about solving the unemployment problem among a minority of the muslim population that have trouble integrating. I think part of the problem lies in xenophobia of Norwegians slowing down the integration process, part of the problem lies in concentration of many migrants in certain hotspots in Oslo rather than spreading them more thinly accross the country, part of the problem lies in that it is relatively easy to game the social security system (ethnic norwegians do it too) and it is an addictive sport and part of the problem lies in not enough knowledge of Norwegian (i.e. we need more incentives and soft coercion tactics).

So to sum up: Passive start in Norway, Xenophobia, ghettoification, complexity of social security system and lack of Norwegian knowledge.

But there definitely has been a flood of new immigrants in the past ten years, including muslims, but it is mainly due to wars from which Norway has benefitted immensly (higher oil price). Sure it might be a bit of a culture shock to go to a welfare office in Oslo and see it flooded with veiled muslims, but it is only the most visible part of the picture.

As far as I know immigration is pretty in almost all cases a net positive. Personally, I’m not all that happy about organised religion, but I am confident that spending time here makes people less devout and more practical, until after some years it receeds into the background. I do understand that it can be uncomfortable to ‘feel like a stranger in your own country’ but things do change, and we all have to learn to accept that people are just human, no matter how strange their culture might be (and in this respect I think the candaians have come far, just look at a pie chart of their three biggest cities, half of it is like a sample of the entire world). In the same way it might be uncomfortable to see an animal die, it is something one should to be able to stomach if one wants to eat meat. With fear of reading too much into your mother-in-law, it seems hers is an issue of identity and feeling of belonging…and that is never the same once you have crossed the bridge of living in another country, geographically or intellectually.

I think I understand why you are thinking about educating your daughter in Europe. From some of what I’ve seen in the US (it is hard to make valid generalisations of such a large country) it seems, partly, like a really scary and brainwashed place…almost as if it is returning to McCarthyism and only beatnik poets know what freedom of thought really is. Although Europe has similar limitations on the national level, there seems to be a redeeming factor in the increasingly integrated but still extremely multi-cultural EU (especially in the multi-layered, multi-culture of bigger cities), whereas in the US is seems to be alot more uni- or bi-cultural.

*Norway is not a member of the EU, but being a member of the EEA we cooperate with roughly 80% of EU legislation without having any say in it.
Non-EU working immigration is, on the other hand, very restricted.

Dear Jens: Thank you for all the information. I had seen numbers showing a huge (in relative numbers) immigration to Norway in the last ten years or so. I don’t remember the percentage, but it was amazing. I mentioned them at the time of the massacre by Breivik, and some commenter on the blog was disturbed by it, because he believed I said I approved of the fascist racist attack. I was myself bombed by racist French fascists, long ago, so the accusation showed me, onc again how crazy can people be. It should be clear from all what I write that I do not approve of fascist attacks.

As you say, lots ofthings are going down in the USA, and I do believe the Europeans are much better positionned. The USA is favored by the gods (see all the oil, now all the shale oil). However, to be favored by gods makes one lazy in the spirit.

Europe is a world onto itself. The way it is set-up, right now, small countries can have a tremendous cultural influence, even on the big ones. For example Sweden (efficient, cheaper health care, independent currency, positive trade balance in spite of the state being nearly as big as in France, etc.), or Finland (superior education) are used as counter-examples in France absolutely continually… Even in the presidential election.

Eva Jolly (a Norwegian born Norwegian) is running for the French presidency, irritating everybody with her terse lessons. She was one of the most famous judges in France, and now accuses, judge style, Sarkozy to be probably enough of a criminal to be put in “examination” (nearly as bad as USA indictement). Although she will get at best 3% of the vote, she sank Sarkozy, for sure.

The Europeans just have to throw the plutocratic spirit out. Things may change in 33 days or so, once Hollande gets elected. Merkel is going to get her marching orders, and she better goose step in the right direction. She is not going to win the arguments with Hollande, and the SPD will tell the Kanzler that they are following Hollande now, not her.

Norway is a magnificent country. I wish I could visit it sometimes (I have three family members who are genetically part Norwegian. but only the eldest, born and educated in Oslo, has Norwegian citizenship! She did not act fast enough to get Norwegian citizenship for her OWN children!… Who are therefore half Norwegian in race (and Americans with non American, dead fathers) I find that deeply scandalous… As I said there are similar things going on, say in France… I am not for the old German right of blood the way Germany used to have it (before France ordered her to change), but still, with the first generation…It’s a scandal!)
PA

Dear Patrice,
If you ever go to Norway I can recommend midwinter or midsummer up north, pretty much all the coast from Stavanger and north, as well as mountains, valleys and woods. There are some pretty big ski resorts/slopes but its nothing compared to the Alps. Oslo is by far best when you can comfortably enjoy a cold beer in the sun!

The citizenship ordeal is insane. I think Canada has it pretty fair though? Live and work there for 3 years and your a Canadian.

Norway, is great on some parts, but we do suffer from the resource curse.

Eva Joly is one of my favourite people ever. I wish we could just duplicate her and make 1000 Eva Joly and use them to staff and ‘interpol agains corruption’!

Don’t know much about French politics but I doubt Hollande’s promise of reduced retirement age will be followed through. Otherwise it really will be exciting to see how he will play out together with Merkel.

Dear Jens: I knew Hollande’s retirement proposal would come with a twist. It did. People can fully retire at 60 if, and only if, they have paid into the system 41 years (or maybe it’s 40). So it’s mainly for the poor devils who worked hard all their lives with their bare hands…
French politics is fascinating.

Eva was elected inside the Green Party and crushed the very popular Nicolas Hulot (famous for his nature movie withan Indiana Jones component, where Indiana Jones spends lots of time flying around in motorized hang glider. He did that forever… She is funny because at this point she is admonishing all of France for not being tough enough with Sarkozy. People are quaking in their boots that hollande will make her justice minister, and whining her Norwegian accent, and her clipped judge like style make her sound like a Gestapo general. OK, there were no Gestapo generals, but if they were, and naZISm would all be about the soZIalist part, she would be it, many say. She is totally unfazed by all this, and i hope she puts Sarko under examination, as she said she would last night…

Anyway I like Eva Joly very much too. Always have. She cleaned a lot of French politics, and tried to do it in Iceland too. She extracted an accord from Hollande about the legislative election in June. Some of the Hollande announced reforms are obviously Norwegian inspired (people have non debated putting some of the restrictions put on politicians in Norway).

Merkel is not going to be amused, and she knows it. To pre-empt Hollande, she flew low cost to Naples. Now she can tell him:”Francois, i am just like you!” She will adapt. The SPD can’t wait…
It’s Obama who is in for a rude wake-up. His ridiculous, brainless show in Afghanistan is going to come to an abrupt end.
PA

Recently it seems the more information I get, the more disillusioned I get. I see (wasted) potential everywhere and have become more conscious that I need to minimise my own waste as it seems to have piled up from most of my life being spent with much greater illusions than I have now. Although I do believe it is important to have a healthy and honest political system I have no faith that a political party in itself can provide the change needed. Even the most radical liberal of political parties are far too conserative. And the radicals are mostly radical for the sake of being radical rather than from realpolitik.

For example, I see the question of higher or lower taxes (i.e. 15%, 30% or 50%) as a minor question that simply distracts us, grabs our attention and shores up votes. Far more important than the level of tax, is how the tax money is spent and how it is collected (complexity increases loop-holes, waste and corruption). The organisation of the state is the most important part of it, not increasing or decreasing it with a few percentage points. I mean changing the flow of 20-50% of the entire GDP is more than enough to achieve what is needed. Then we can take the debate about tax levels afterwards.

-Reforming intellectual property;
-Removing special interests;
-Simplyfing, reducing and standardising regulation;
-Investing in much needed infrastructure like smart fiberoptic/electric grids;
-Reducing defense budget (in the US, halving it to French levels of gdp could probably be achieved without losing any important capabilities);
-Regulating and controling the drug trade;
-Replacing plethora of social security with a simple basic income/negative-income tax system ($10k a year to the 1/5th in the US is cheaper than current SS spending);
-Limiting farm size and output (joblessness solved in an instant by returning labour to the agricultural sector and med costs reduced as food would be healthier, the basic income would ensure the economical survival on a small farm, and the biosphere would thrive…you can remove all trade barriers on food, but charge a small tax that exponentially increases by distance from where it was produced);
-The slightest spending on a global UN funded, open-source space pogramme, would yield incredible returns in something like a decade;
-Cracking down on corruption.

Going through with reforms like the ones mentioned above does not require a change in the size of the state – it only requires a change in its organisation. Almost no parties in any country in the world want these changes, yet changes like these is where the real battleground for progress lies.

Jens

P.S.
This is all conjecture and suggestions, but I am confident that a single, reform-minded government could achieve most of it within one period.

You are one smart cookie. I like all your suggestions, but I do not share your optimism in getting them enacted into law.

The negative income tax was first proposed by Presidential Candidate George McGovern in 1972. He won one state (South Dakota, his home state) and lost big time to Nixon.

If you remove the special interests from Washington, there will be no one left.

Sadly, Obama failed to see the importance of the “last mile” of fiber. Had he implemented this small but strategic piece of infrastructure, people could give up their 100 mile commutes to offices where they sit in front of a computer and do it from home.

DOH.

Instead, he wasted his political capital on a health care system that was doomed from the start. Looks good on his CV, but then so does the Nobel Peace Prize he got right before he started attacking Pakistan with drones. But, he is in good company – Henry Kissinger, Yassir Arafat, etc etc.

Not sure what reforms you intend for intellectual property. Michael Eisner got the 50 year Copyright extended to 60 so Diz could milk Mickey Mouse for another 10. Mike rewarded himself with a $60 million bonus, so it was all right in his opinion. Patents were stretched from 17 to 20 so as to agree with the rest of the world. But the Chinese pay no attention anyway, so who cares? As for “music”, most of what comes out of the USA these days is RAP, so I don’t care a whit if they get copied and ripped off.

The “small farm” has been a matter of mythology for 25 years now. Agribusiness is here to stay. The AgCorps just use the “family farm” as a whipping boy to get what they want passed in the FARM BILL – that every 5 year pig trough of subsidies and supports – without which we would ALL be better off. The US subsidizes the corn that goes into the HFCS in soda pop that makes people fat and gives them diabetes.

I first heard a few bits about McGovern in a documentary about Hunter S Thompsen. It didn’t go in detail about his policies but it clearly showed the difference between McGovern as a man who with great plans he wanted to take to Washington vs that abomination Nixon.

The most important thing to me was for Obama to close down Guantanamo, but when he failed there (later heard he has been expanding a system of secret cia prisons in different countries around the world), I knew that if he had ever had a vision other than power, he had then become completely compromised.

About intellectual property I pretty much want to remove or severely restrict it. You cannot patent DNA, you cannot patent software, you cannot patent medicine. When it comes to music and movies, most high quality stuff is low budget anyways and could easily be crowdsourced, the big studios and the big money is just in the way of creating real art. Tons of great artists were poor anyways, and it didn’t stop them from making the greatest art ever.

When it comes to life I am an optimist, but not when it comes to politics. I have no faith that the political system will deliver these changes, but I do think it is possible to convince people that things like that needs to be done. And I merely pointed out that they could be done pretty fast.

Things like drug policy is actually seeing change, due to people convincing other people who in turn convince other people. Natural foods is seeing a massive upturn in interst, and all you need is to mix david attenborough footage with footage from industrial farms, list all the problems, subsides, monoculture is basically the antithesis to biodiversity…which basically IS all that is beatiful and good about life etc etc. Films like Food Inc are already doing some.

Al Gore and his propaganda film did wonders, he didn’t manage to achieve change in federal US, but some states and some people’s mind have changed. And in Europe there was more impact.

The point is, you just got to find the right rethoric, the right narrative an it will start spreading, people will convince other people and there will be no way to stop it.

An example of how uch difference the ‘way’ you talk about something makes is talking to someone about ‘legalisation of all drugs’. To people who have been indoctrinated by the state propaganda, that sounds something like ‘make drugs freely available to any and all…Basically, start pushing drugs, especially heroin to schoolkids.’ Once they hear that you can talk all you want about all the benefits and virtually no downsides of legalistion and they will never listen to you. BUT if you, on the other hand, say that you want to ‘regulate and control illegal drugs rather than let criminals freely push addictive stuff to kids’ it starts sounding better, and you are building a rethoric and a narrative that ordinary people can swallow. What you need to do is to hijack the rhetoric of the movement to protect kids against drugs but just switch the means at the end.

As long as the internet remains relatively free like it is. There is no way you can stop the hive mind from reaching logical conclusions. And by trial and error you the right types of messages will start spreading. We just gotta keep talking.

Thanks for the clarifications, Jens. And I DO share your optimism about people, just not the current one-party political system here in the USA. But the 99% ers are just getting started. What is now needed is an alternative economy so we can bypass Wall $treet and the Corp structure. After all, we are a post industrial knowledge economy. Why can’;t we work out a system to go with it?

dear Old Geezer: The feudal rich wants to keep on enjoying life as they have it. They are the force behind plutocratization. That is why they engineered no taxes on inheritance anymore. In this perspective, new technology is their enemy, and so is new knowledge. Hence the destruction of public education. that is why we can’t work out a different system, because those at the levers of command, or just behind, are against it. Watch Obama evoking Buffet all day long, as if he were the new prophet…
PA

Dear Jens: According to my spouse, who became friend with BO at age 11, he was always a “schmoozer” (whatever that means; conniving?) and a procrastinator.
What struck me, though, he that he acted afraid. He is continually surrounded by an army dressed in black. Literally hundreds of imperial troops with huge guns. He goes around with his children, and there is a guy with a huge gun, a few feet away. I think, in retrospect, that he was terrozized at the idea of crossing the plutocrats. Those are all over the military-industrial complex, not just banks and oil.
FDR was a military man. So were Churchill (same job as FDR in WWI), or De Gaulle, who fought courageously in 1940). Stalin, Hitler, had seen comabt. so did krutschev (He was installed as Party overviwer during the siege of Stalingrad!)

What did Obama do that was courageous? Before he became president? Basketball is not exactly a risky sport… Let alone the fact he is greedy, of course. Among plutocrats, he is a tiny fish larva, a form of plancton, with his measly ten million dollar fortune.
PA

“Tons of great artists were poor anyways, and it didn’t stop them from making the greatest art ever.”

You don’t get it do you, the issue never was to lift artists out of poverty which is not only very good to them as we all know but their rightful place on the ladder, it’s about producing wealth from their work, but benefiting the only worthy ones: the wealthy.

Which is why soccer players can get obscenely rich, but singers are expected to OD beyond a given bank balance. (but is it art? OK, good point).

Dear Dominique,
I was just trying to point out that today’s system favours big studios/publishers and low quality art. If I want to listen to an RJ recording from the ’30s, it is not in the public domain and some big recording will get money…but Robert Johnson died more than 70 years ago!

One should change intellectual property on artworks so that it does not last de facto forever. Secondly one need to make a clear distinction between using a work for commercial purposes and simply copying/sharing it for people to enjoy.

I DO think that artists should be compensated, but generally I think that it is all about performance money, crowd-sourcing, donations, t-shirts, special editions etc. Music and movie making equipment has fallen drastically in price, and there is no need for big studio/record/publishing companies any more.

Big companies can pile money on a few artists, but the quality of their art is not going to get any better. And when people aren’t spending money on royalties for downloads, they have more money to finance art through measures like I mentioned above. This will circumvent big companies and hook the flows of money directly to artists themselves.

Dominique: Searching for wealth and power can distract from true creativity. That has been part of the problem of Obama, and that is the problem Churchill or FDFR (who already had both) did not have. Nor did De Gaulle; as a military man, he had tested the real thing, and did not care for ersatz… BTW,

Those who are paid enormously are the tip of an obsession society has, wants to encourage, and thrives by. As the soccer machine, and those who feed it demonstrate their wealth, our society demonstrates a misallocation of resources, and moral failure.

I watch sports on TV rarely. Last time I remember was the finale France Brazil in 98. It was clearly going to be extraordinary, a jump in another universe, where France crushed Brazil. i have never paid a ticket to a sport event (although once I was invited to watch intensely boring American football at Stanford).
As far as I am concerned, sport is to be practiced, and only mental retards believe it’s to be watched… with only the likes of me around, most TV sports would go the way of corrida in Catalunya… Nobody to watch it, and, ultimately outlawed.

Why outlawed? Because, and it’s blatant in the USA, these big TV sports get crucial PUBLIC subsidies (diverting money from universities, too!)
PA

I can’t get off of this thread. It is very interesting. One thing we all agree on here is how skewed (and screwed) the state of finances are around the world. The 1 % have treed the 99 %. So, I ask as a thought exercise, if the 99 were to CONFISCATE ALL THE WEALTH of the 1 %, would it amount to very much? Other than making us all feel better for seeing justice done, would there be much of a change? I am asking this question because I really don’t know the answer. It is NOT retorical.

The other thing on my mind is whether capitalism as we know it can function or even survive in a flat or contracting economy. This again is not retorical. For the past 250 years, the world economy has grown – more people, more manufacturing, more services. What if that growth were to stop? How can capitalism continue to return 5% to the holders of the money when there is no increase in world GDP?

Dear Old Geezer: very interesting questions. I will answer the first one in a little essay, it deserves it. The answer is yes, and it has to do with decapitating the erroneous economic philosophy presently ruling arrogantly. (OK, I made a similar promise to Dominique Deux, and did not deliver yet! Since I have major travel around the corner, complete with child, it’s not going to be easy!)

On question two, once energy restrictions starts, growth is going to be history. Already is, as far as the commons are concerned. The only way out is a massive effort in new tech (thorium reactors!). Scrambling on PV and electricity storage could help considerably.
PA

Dear Patrice, second on the thorium reactors! A friend of mine pointed out, though, that research shouldn’t be directed as one never knows what the consequences of that research would be and that many of the greatest discoveries where made by accident.

My counter to that is that we are all so screwed at the moment that we just need to pile a ton of resources on research on technology we know for sure has a potential to help and hope we can achieve the same rapid development of new technology as we saw in WWII.

Justice is a very fuzzy concept. More important in my mind is the consequences. And therefore my long answer is that it depends on how it is done. Redistributing wealth more equally is definitely the way to go, but simply seizing it brings a whole new set of problems because everyone is dependent on the current system, and the wealth siezed wouldn’t be worth anything if the wheels of the economy stopped turning. If you found some way to determine which assets are ‘the wealth of the 1%’ and put it all in a big wealth fund owned by all you would keep the wheels turning, but you would simply have much more of a command economy which brings its own problems.

Economic growth in the system we have now is clearly bad, but that is beause the system is flawed and economic growth in itself is not the enemy. Rather the enemy is the tragedy of the commons. Taxing land (land in economic theory is not only land but “all naturally occurring resources whose supply is inherently fixed”) is a great place to start in my mind. The geolibertarians propose to solve many of the typical problems of libertarianism like very unequal distribution of wealth as seen in medieval Iceland, where Norwegian tax and authority refugees created an early anarcho-capitalist/libertarian society (http://www.daviddfriedman.com/Academic/Iceland/Iceland.html) and the overconsumption of common resources…it might even be a way to charge for ecosystem services so that the true cost is brought into the economic system.

Economic growth does not necessarily have to consume natural resources and can in theory continue indefinitely. Our current monetary system is not sustainable without growth in world GDP because it is debt-based money. Money is issued as debt by a central bank and the interest on that debt can only be financed by new debt which requires growth to finance. Debt-free money is an interesting proposal that does not require growth. But even if it doesn’t require growth, it doesnt mean that we won’t use up all the limited resources anyway.

So my solution to both question is to put a price on all those finite resources we have on earth and use that tax to maintain a healthy earth and redistribute it to people (which are a part of that ecosystem).

You wrote
“…Soros kicked Britain out of the EMU….” Not sure what you refer to here.
Are you referring to the profit he made by betting the Pound Sterling would be devalued when he sold about 10 billion Pounds because he was aware the British had reserves that were limited?
In general, if you were to assert that this was at the beginning of the era (we’re in today) when private investors began to wield influence and power that Central Banks could no longer ignore this is correct. I’m not putting a positive or negative value on it, just saying it happened. Today Central Banks must act together to be successful at turning back trends they don’t like. i.e. when they acted together last year and halted the rise of gold, the U.S. Fed loaned the ECB lots of dollars so that the ECB in turn could give unlimited amount dollar loans to European banks for 3 years to provide the dollar liquidity they needed, and lastly the Fed (may also have) loaned Switzerland money it used (is using) to keep the Franc from appreciating further once it pegged the Franc to the Euro and then set a barrier at 1.20 Francs per Euro. These are only a couple of examples.

I agree with those who think the primary risk is of banks and other institutions doing foolish things because they believe they will get bailed out. No question that both businesses and government institutions will do foolish things when there do not appear to be any consequences, particularly for managers who will get their bonuses or golden parachutes and can leave town before the roof caves in.

dear Jeff: Hectic in Rome here…. Will write several essays on the subject.

Soros made a BILLION selling short the pound. He and his fellow plotting plutocrats assembled an army of rumors to get Britain out of the EMU and the British government caved it. Then they tried the same with France. But that failed.

As I said the entire era of the reign of financial plutocrats was in 1973. The USA got out of Bretton Woods, while the French BANKER (& president!) Pompidou and his finance minister VGE plotted the 1973 law, ostensibly anti-inflationary, but really pro-plutocratic. This is the root of the presently flawed EMU. Amusingly the USA is a socialist republic, relatively speaking.

The Fed loaned dollars to the ECB, but I don’t think it did to the Suisses. No need.
PA